21st century servitude as reported by the New York Times

March 4, 2013

The New York Times offers us today an interesting article on corporate profits and employment, telling us that profits continue their stratospheric rise while the number of workers needed to produce those profits along with their pay continues on its sorry downward path. I think it’s worthwhile to briefly sift through this piece as it gives us a pretty good picture of 21st century servitude.

The article notes that “With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers.” I might add that, with oligopolistic conditions existing in all industries, there is also no pressure to reduce prices. What a gravy train! The co-head of global economics at Bank of America Merrill Lynch is brought in to tell us, with a great deal of understatement, that “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.” Of course, except for a minor blip in the late 90’s, the labor market hasn’t “recovered” since its demolishing back in the late 70’s! Quite a downturn! And, without systemic change, it’s impossible to even visualize how it could ever recover given the combination of oligopoly pricing power, fierce global labor competition, ever rising productivity, capital mobility, and so on. The “corporate sector” holds all the cards. And, wait a minute, how Orwellian to call it a “sector”; it’s not a sector, it’s simply ownership. We lose nothing re-phrasing the above quote with: “Those who own the planet are in a lot better health than the overall human population”. No shit!

The article notes that corporate profits stand at 14.2% of national income, its highest share since 1950, while the portion of income that went to employees was just 61.7%, near its lowest point since 1966. The share to employees, though, includes CEO and other high wage salaries and it’s therefore certain that the vast majority reap well less than half their output. Even using the reported figures, almost 40% of distribution in the economy (100-61.7) is funneled to the very top tier, in the form of either profit, interest, or rent.

Is there any sense of guilt on the part of the ownership “sector”? Any indication of humanity? No way! “The market wants more austerity” says the head of United States equity and quantitative strategy at Bank of America Merrill Lynch. They want more austerity and they want to squeeze ever harder as productivity continues its inevitable upward rise. “Right now, C.E.O.’s are saying, ‘I don’t really need to hire because of the productivity gains of the last few years,’ ” the chairman of the accounting giant PricewaterhouseCoopers tells us nonchalantly, as if he were talking about copper demand rather than human beings. And, we’re told, “The relentless focus on maintaining margins continues, even though profit and revenue have never been higher; four days after the company’s shares soared past $90 to a record high last month, United Technologies confirmed it would eliminate an additional 3,000 workers this year, on top of 4,000 let go in 2012 as part a broader restructuring effort.”

I think the lowest part of this whole immorality tale is that the corporate titans sitting on top of planet Earth demand everything. They must have the right to price as they see fit, fire as they see fit, set production levels as they see fit, personally reap all rewards from productivity gains as they see fit, flee any country as they see fit, hide their wealth as they see fit, and, most importantly of all, democratically elected governments must do absolutely nothing to interfere. Such is the nature of their freedom. Has there ever been a king as ruthless as these rulers? They behave like an alien species; but what should you expect of a system which puts humans on the same moral plain as commodities?

Typically, given the ideological power of business, the Times didn’t think to quote any representative of “the people” or “the worker” in this article. Who in the world would you quote? Is there anyone out there?